Banking Interpretations

May [ ] ("Bank”) charge inactivity fees on checking accounts? In
particular, you asked whether the bank may charge inactivity fees on checking accounts
that are

assessed monthly service fees

not assessed monthly service fees because the balance exceeds the average
minimum average balance requirement, or

Issued to senior citizens that are not assessed monthly service fees

Recommendation

Yes, the Bank may charge inactivity fees on checking accounts, including the particular
accounts you asked about. There is nothing in the Banking Law that would preclude the
Bank from assessing inactivity fees on checking accounts, but the fees should be
disclosed and be consistent with account documentation.

Background/Reasoning

The Bank, being aware that Section 7.2 of the Banking Law restricts inactivity fees on
savings accounts, asks whether there are any comparable provisions that would restrict
the charging of inactivity fees on checking accounts. The answer is no. There are no
provisions of New York law that would restrict the charging of inactivity fees on any
checking accounts, including the particular accounts you asked about and, therefore,
the Bank may charge inactivity fees on checking accounts.

As a cautionary note, however, the bank should disclose the amount of the fee to be
charged and the terms and conditions under which it will be charged. Also, the fee
should be consistent with account documentation provided to the customer.